France lashes out af­ter dig­i­tal tax bat­tle but ner­vous times re­main for Ire­land

FRENCH fi­nance min­is­ter Bruno Le Maire took aim at Ger­many as his bid for an EU tax on tech­nol­ogy gi­ants floun­dered yes­ter­day.

As prob­a­bly the keen­est sup­porter of the pro­posed EU dig­i­tal tax, he’ll have been dis­ap­pointed by the level of op­po­si­tion the mea­sure faced at a meet­ing of Eu­ro­pean fi­nance min­is­ters ear­lier this week.

The French are hop­ing the law will be backed at a meet­ing next month – and are will­ing to have its im­ple­men­ta­tion then sus­pended un­til as late as the end of 2020.

It­woul­don­ly­comeinatthat stage if the is­sue hadn’t been tack­led by the Or­gan­i­sa­tion for Eco­nomic Co-op­er­a­tion and De­vel­op­ment (OECD).

De­lay­ing the im­ple­men­ta­tion is a se­ri­ous con­ces­sion by France – but it wants agree­ment quickly to stop other mem­ber states from go­ing off and im­pos­ing sim­i­lar dig­i­tal taxes on their own, like Bri­tain now plans to do.

The mea­sure needs una­nim­ity to pass and while the op­po­si­tion of Ire­land won’t have been a sur­prise, it ap­pears Mr Le Maire is now get­ting ner­vous about Ger­many’s back­ing.

The min­is­ters’ meet­ing broke up with the pro­posal look­ing like a dead duck.

Ire­land, Swe­den and Den­mark were op­posed – and some coun­tries said they would press ahead on their own.

Aus­tria said di­vi­sions now ap­peared to be so deep that chances for a deal had nar­rowed con­sid­er­ably, while Dan­ish fi­nance min­is­ter Kris­tian Jensen said: “It is very dif­fi­cult to see an agree­ment on the dig­i­tal tax be­cause so many tech­ni­cal is­sues are not solved yet.”

One such is­sue sprung from Ger­many. It sought a re­vi­sion to the terms of the tax which would pro­tect car-mak­ers like Volk­swa­gen from com­ing un­der the tax’s scope.

Mr Le Maire tried to put a pos­i­tive spin on things, say­ing the de­bate was mov­ing in the right di­rec­tion. He made a joke about Fi­nance Min­is­ter Paschal Dono­hoe, say­ing: “It just re­mains for me to of­fer Pascha­l­abeeri­naDublin­pub, and then I think we’ll be able to move to­ward a de­ci­sion.”

But on Fri­day his rhetoric was not so joc­u­lar. “Ger­many’s fail­ure to back a pro­posed EU tax on big in­ter­net com­pa­nies would dam­age trust be­tween France and Ger­many.

“We can’t imag­ine for a sec­ond that Ger­many does not stick to its com­mit­ments and de­cides not to adopt the di­rec­tive in De­cem­ber,” Mr Le Maire said in an in­ter­view with ‘Les Echos’.

“That would be a break­down of trust be­tween France and Ger­many”. Whether that has the de­sired ef­fect in Ber­lin may well be moot.

Paschal Dono­hoe de­clined to spec­ify whether he would use a veto against the tax, but made it very clear that as far as he was con­cerned the OECD is the place to sort this all out.

The op­po­si­tion posed by other coun­tries should help mit­i­gate against any at­tempt to link the tax with sup­port on Brexit, as has been hinted at by anony­mous of­fi­cials in me­dia re­ports.

Such re­ports no doubt served to fo­cus Min­is­ter Dono­hoe’s mind, but main­tain­ing his op­po­si­tion in any case looks now to have been the right call. It looks like France may have lost this par­tic­u­lar bat­tle – but there will be many oth­ers.

Mr Le Maire’s stri­dent com­ments against Ger­many are per­haps a re­flec­tion of that coun­try’s wan­ing in­flu­ence – and a con­comi­tant growth in French power in Brus­sels.

Ger­man chan­cel­lor An­gela Merkel and Bri­tain are on the way out, Italy is not quite a bas­ket case but looks like it could be­come one, and so the French look poised to take the as­cen­dancy among the EU na­tions.

That might spark a bit of ner­vous­ness for Ire­land, which is los­ing its big­gest ally and has just helped thwart the French on one of their flag­ship ini­tia­tives.